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Market News Commentary - From The Desk of David Loesch 10.23.2018

Submitted by Tax Free Municipal Bonds/Fixed Income Specialists/DRL Group on October 23rd, 2018

Atlantic City was upgraded two notches by S&P to B on 10/16/2018. S&P indicated that this reflect their opinion of the city improved operating environment and structural financial improvement following the settlement of outstanding tax appeals and the continuation of extensive oversight.

Invesco is purchasing Oppenheimer funds, with this purchase, two firms (Investco and Nuveen) have control of about 40% of the assets of the high yield MUNI bonds funds. Oppenheimer is a large HY player in the street and owns a many CUSIPS of PR HY paper.

Bond market bull Robert Tipp who is the head of global bonds at PGIMFI, expects the 10T to close back below a 3.00% in the “not too distant future”. Looking out a couple of years, he expects the 10T to trade around a 2.50%.

Sales of US homes eased in Sept to the weakest in almost 3 years due to increased rates.

Tax Exempt MM funds are piling up the cash. Assets have grown to 134B which is the highest since mid-July.

PR bonds continue to rally with the end of restructuring near. There was a fiscal plan that was sent out Friday 10/19/2018 that indicated and showed more money to “repay” bondholders while also servicing the insured debt in its entity.

It would be my pleasure to speak to you directly about the current markets and how The DRL Group can be of service to your fixed income investment portfolio. To schedule a time to talk, please email me at dloesch@drlgroup.net.

This content is based on the opinions of David Loesch based on his review of articles from Bloomberg.com or CNBC.com.

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